Old Nat. Bank v. Marcy

• Decision Date: 28 May 1906
• Citation: 95 S.W. 145
• Parties: OLD NAT. BANK OF FT. WAYNE v. MARCY.
• Court: Arkansas Supreme Court

95 S.W. 145

OLD NAT. BANK OF FT. WAYNE v. MARCY.

Supreme Court of Arkansas.

May 28, 1906.

Appeal from Circuit Court, Crittenden County; Allen Hughes, Judge.

Action by the Old National Bank of Ft. Wayne against R. G. Marcy. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

Berry & Shafer, for appellant. Frank Smith, for appellee.

HILL, C. J.

Appellee executed five promissory notes to Noble Machine Company, of Ft. Wayne, Ind., each for the sum of $300. The first one was due 97 days after date, and one fell due each month thereafter. The notes were plainly numbered on their face, No. 1, No. 2, etc. The notes were payable at appellant bank. They were assigned to the bank, and suit was brought by it upon them. The bank alleged that it was an innocent purchaser for value before maturity, and that was the only issue in the case. The evidence is uncontradicted that there was a partial failure of consideration and the Noble Machine Company could not have recovered on the notes. The court directed a verdict as to the first two notes, and that action is not complained of. The jury returned a verdict in favor of the makers as to the last three notes.

1. The chief contention is that there was no evidence to show that the bank had notice, and was not an innocent purchaser. The bank cashier testified positively and circumstantially to the purchase of each of the notes, which was for full value. Noble (who did business as Noble Machine Company) testified also to the sale of the notes in due course of business to the bank and that the bank was without knowledge of the defense to them. These facts were developed: All the notes were sold for face value and accrued interest, and indorsed by Noble and by the bank credited to his account. The first two notes were sold November 24 1903 (the notes were dated October 6, 1903), the third was sold March 3, 1904, the fourth April 1, 1904, and the fifth April 7, 1904. On January 15th the bank at appellee's home, the Bank of Crittenden, received from appellant bank for collection the first note, and returned it to appellant on January 16th, stating that payment was refused. On February 20th this bank again received this note together with note No. 2, for collection, and returned them to appellant bank stating payment was refused. On March 8th the Bank of Crittenden received from appellant bank note No. 1 again, this time with directions to turn it over to lawyers for suit; notes 2 and 3 were received with similar instructions on March 17th; note No. 4 was received from the appellant bank April 4th, and returned April 14th. The cashier of appellant bank evidently saw the serial figures on the notes, and he says he thought the consideration for the notes was a sale of machinery. It will be noted that after the purchase of the first two notes and before the purchase of the third note that payment on No. 1 had been twice refused, and on No. 2 had been once refused. Before the fourth note was purchased suit had been directed on Nos. 1, 2, and 3. All of these matters were conducted through appellant bank, and of all of them it had notice, of course, and this notice was certainly sufficient evidence to sustain a verdict that the appellant bank was not an innocent purchaser. These facts are strengthened by the conduct of appellant bank. Noble, the indorser, was one of its stockholders, a customer and a man of large means, and naturally would make good his indorsement on demand; and if he did not do so the bank could have its law suit in its home court instead of going into another state to pursue its remedy. Of course, it was within its rights to elect which party it would sue, but when it elected to leave home to do its suing when it had full and complete redress at home, the jury had a right to...